Many other sectors saw their weights fall in 2020, including financial services, healthcare, industrials, real estate, and utilities. Amazingly, energy stocks represented 11.3% of index weight in 2010. Meanwhile, energy's share within the index fell by nearly half, to just 2.1%. The consumer cyclical sector also saw its weight rise thanks to ( AMZN) and Tesla ( TSLA). Last year saw the technology sector's weight within the Morningstar US Market Index rise by 5 percentage points to one fourth of the index. and value over growth.Īs the pandemic wreaked havoc on many economic sectors, while benefiting many of the largest stocks, how much of an impact did 2020's trends have on the market's profile?

What followed that boom was a decade led by stocks outside the U.S. As a recently published report looking at changes to Morningstar Equity Indexes demonstrates, equity markets today bear resemblance to the late 1990s. Nvidia's meteoric growth represents a period in which global equity markets were dominated by high-priced technology-related stocks low on dividends, mostly from the United States and China. As of year-end 2020, Nestle had slipped to the 17th slot, but more tellingly, Nvidia clocked in at number 20 with help from a 122% return last year. In 2010, Nvidia was the 731st-largest constituent in the Morningstar Global Markets Index and Nestle was the fourth. The past decade belonged to the Nvidias of the world. Nvidia sports a meager dividend yield of barely 0.1% and a relatively lofty P/E ratio of 85 times trailing earnings, but it has been growing earnings at a 32% rate. Nvidia ( NVDA), for its part, is a U.S.-based technology company, the leading designer of graphics-processing units used for gaming and cloud applications. Nestle ( NSRGY) has a forward dividend yield of roughly 2.4%, has grown earnings at about a 5.0% rate, and is trading at a reasonable but healthy trailing price/earnings ratio of around 22.

The former is the well-known Swiss food and beverage manufacturer that employs nearly 300,000. The story of global equity markets over the past 10-plus years can be encapsulated by two big-name stocks: Nestle and Nvidia.

Nvda forecast 2010